Formation of the mesodermal germ layer is a critical step in the initiation of vertebrate embryogenesis. In addition to forming muscle, heart, blood and kidney, embryonic mesoderm drives the morphogenetic movements of gastrulation and induces formation of the central nervous system. The study of mesodermal development in the amphibian, Xenopus laevis, has demonstrated the importance of cell interactions in establishing mesoderm and has identified signaling pathways that control mesoderm formation. Experiments in Xenopus and other systems have identified Nodal-related members of the TGFBeta superfamily as key regulators of mesoderm formation, but the regulation of Nodal gene expression and the transcriptional response to Nodal signals are not fully understood. It is these transcriptional events that result in the determination and precise patterning of the mesodermal lineage. We have identified FoxD3, a forkhead family member, as a transcriptional repressor with potent mesoderm-inducing activity. FoxD3 is coexpressed with Nodal genes in Spemann?s organizer and induces a mesodermal response identical to Nodal. Using molecular and embryological approaches, the following hypothesis will be tested: FoxD3 is an essential transcriptional regulator of mesoderm formation that activates the Nodal signaling pathway. Toward this end we propose to: 1) Determine the requirement for FoxD3 in Xenopus mesoderm formation using activator fusion proteins that antagonize FoxD3 activity and morpholino antisense oligonucleotides that inhibit FoxD3 translation; 2) Determine the functional interaction of FoxD3 with the Nodal pathway using specific inhibitors to define the dependence of FoxD3 function on the Nodal pathway and the dependence of Nodal signaling on FoxD3; and 3) Identify the functional domains of FoxD3 required for mesoderm induction and transcriptional repression, and examine the role of Groucho corepressors in FoxD3 activity. These studies will elucidate the embryonic and molecular function of FoxD3 in the process of mesoderm formation. In addition, the activity of FoxD3 suggests that mesoderm formation in Xenopus involves repression of an inhibitor of mesoderm induction, and such a disinhibition model of mesoderm induction, not proposed previously, will be assessed in this proposal. Mesodermal defects are implicated in embryonic malformations and pathologies of childhood and the adult. Therefore, the study of FoxD3 may shed light on mesodermally based congenital abnormalities and disease states. Furthermore, as a regulator of mesodermal determination, the study of FoxD3 may have an impact on advances in tissue regeneration and organ culture.